(TNND) — The National Retail Federation warned of the impacts from President Donald Trump’s tariffs, even as the trade group showed expected growth in its retail sales forecast.

The NRF is forecasting retail sales to grow between 2.7% and 3.7% this year, reaching $5.42 trillion to $5.48 trillion.

But NRF also expressed its concerns over the new tariffs.

Trump announced a baseline 10% tariff on nearly all countries, with many countries facing higher reciprocal tariffs.

NRF Executive Vice President of Government Relations David French said the tariffs will be passed along to American consumers in the form of higher prices.

"More tariffs equal more anxiety and uncertainty for American businesses and consumers," French said in a statement.

"While leaders in Washington may not care about higher prices, hardworking American families do."

In the wake of the tariff announcement, business professor Jay Zagorsky said he expects that existing retail sales forecasts will prove too optimistic.

Retail sales might surge in the short term as people stock up before the tariffs kick in, he said.

But then he expects retail sales to fall.

Large tariffs will increase the cost of everything from restaurant meals to cellphones, he said.

And Zagorsky said the higher costs will sink retail sales.

Zagorsky, a professor with the Questrom School of Business at Boston University, said he’s expecting disruption for the American consumer.

And that is sure to have an impact on the economy, with consumers accounting for roughly 70% of the gross domestic product – a broad measure of the country’s economic growth.

Zagorsky said he expects discretionary spending to drop.

“We spend a lot, and we have a very nice lifestyle because of it,” Zagorsky said.

But he’s expecting Americans will become more cautious with their money given the impacts of the tariffs or even from the uncertainty created by the tariffs.

“There's a little bit of hope,” Zagorsky added.

Folks might think the full tariff rate will apply to the price they pay at the store.

For example, Trump has imposed a 32% tariff on products from Taiwan.

But Zagorsky said if you buy a $200 pair of headphones that were made in Taiwan, the price won’t be 32% higher, or $64 more.

A tariff rate applies on the import price, which is lower than the wholesale price, which itself is lower than the retail price.

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Some products have a large markup, but it varies.

“Importing socks and underwear is very different than importing iPhones, where there's a lot of value added still in the United States, even though the physical manufacturing is done someplace else,” Zagorsky said.

That means consumers might see almost the full brunt of the tariff on a package of new socks but relatively little on a new iPhone.

Zagorsky said Trump’s rationale for the tariffs was accurate in some respects.

We have had a hollowing-out of manufacturing in the U.S.

And that has rendered our defense-industrial base dependent on foreign nations.

“It's very hard if you can't make your own boots” when you need to fight a war, Zagorsky said.

“You have to depend on somebody else,” he said. “That is a military problem. So, there is some truth to what is being written.”

But he said American manufacturing can’t be changed overnight, and the baseline tariffs go into effect this weekend.

“There's no period for adjustment,” Zagorsky said.

He noted that just securing a permanent electricity connection for a warehouse in the U.S. takes several months, not to mention the land acquisition, regulatory hoops, construction, materials acquisition and hiring.

“You can't build a high-tech fab plant in a week,” Zagorsky said. “These are multiyear projects. Even if you're 100% invested.”

Zagorsky also said the U.S. doesn’t need to make everything.

Some things are made better or cheaper in other countries, he said.

“We don't really grow any tea in this country. We just don't have the right climate. Don't have uplands with the right temperature and things like that. We grow a little bit of coffee in Hawaii. But the idea that we can manufacture everything, well, there's certain places that are much better suited,” Zagorsky said. “A quick example is aluminum. Aluminum takes a huge amount of energy, huge amount of usually electricity to make. Right now, with AI data centers going crazy in building, we don't have massive quantities of cheap electricity. Canada has a large amount of hydropower. It really makes sense to make aluminum in Canada. It doesn't really make sense to make it in Pittsburgh. Economically, if you're trying to look for relatively efficient ways of manufacturing, we shouldn't be doing everything.”